Tyco: Rebuilding a Tarnished Brand

April 24, 2006

Tyco is a $40 billion multi-industry company with 260,000 employees worldwide. It is the second largest conglomerate after GE. They hold the #1 or #2 position in every business they are in. The company is divided into five key segments:

Segment billions in revenues

Electronics $10.3

Healthcare $8.6

Plastics & Adhesives $1.9

Fire & Security Services $11.3

Engineered Products & Services $4.7

That's today. In 2002, however, the company went from one of the TOP most admired companies in its peer group to #10 (among ten), due to inappropriate ethics and a narrow business focus by key management:

The company heads were indicted.

The company was too focused on increasing its brands without bothering to develop the brands under their umbrella.

Tyco had strictly become a holding company for lots of brands (Most recognized, perhaps, and category leader ADT).

After 2002, new management came in and began a tremendous push toward building the businesses within the Tyco brand, as well as the Tyco brand itself. They used a three step strategy:

Customer Focus--Determine what consumers know about the brand and how they feel about it.

Launch Corporate Branded Advertising with New Positioning--"Tyco--A Vital Part Of Your World."

Advertising with this tagline launched in 2004 in print (newspapers and business publications), on the Internet and was joined shortly by television. Leadership felt that if they did the new positioning well, the Tyco enterprise would embrace it. Tyco did and the company got back on solid ground.

Utilizing an 'Image Dashboard,' Tyco watched its key attributes gradually increase. The 2004 'Most Admired' brands saw a shift into the middle of the pack and a similar Wall Street Journal study reaffirmed this. The metrics and data utilized were extremely important to help beat a somewhat skeptical CFO. This information helped Tyco find their positioning and identify what was needed to bring back respectability and credibility.

Why not just change the name of the company since it had such a notorious reputation and still suffered from collateral bad press?

Management felt that was escapist and knew a solid strategy would right the organization. The senior leaders had complete faith in the brands, businesses and services Tyco represented.

Year 2 of the 'Vital' advertising campaign (the "heart and soul" of Tyco) saw more increases in perception studies with more people feeling strongly about the messaging.

Due to market conditions and the nature of the business, Tyco will be splitting into three or four separate companies. Though nothing has been determined, there are suspicions that this might be the perfect opportunity to retire the 'Tyco' name. The recuperation made by Tyco from the actions of former leadership was phenomenal. The excesses of Enron and WorldCom destroyed the companies. In Tyco's case, the brand was able to rebound and not forever be linked to corporate failure.

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